Legal Resource Center

What is Business/Commercial Disparagement?

 

Commercial Disparagement is the publication of derogatory information about a person’s title to his or her property, to his or her business in general, or anything else made for the purpose of discouraging people from dealing with the individual. It may be referred to as slander of goods, trade libel, unfair competition or interference with prospective business advantage, but the broader title is commercial disparagement. Regardless of the particular label, a business or person may have a claim against another business or person for the oral or written publication of a disparaging statement concerning that business. The policy behind this tort is to allow fair competition among businesses in a capitalistic economy. The tort of commercial disparagement includes not merely false statements about the business, but also extends to false statements about the products or services of that business.

 

Elements of the Tort of Business/Commercial Disparagement

The following elements are generally required to pursue a claim for commercial disparagement:

The statement is false.
The defendant either intends the publication to cause financial loss or reasonably believes that the publication would result in financial loss for the business.
Financial loss does in fact result.
The publisher acts with malice. (The defendant knows either that the statement is false or acts in reckless disregard of its truth or falsity.)

The tort of commercial disparagement is quite broad. For example, it covers an individual’s business reputation, such as a charge that a business is incompetent, dishonest, and unethical. Commercial disparagement covers falsely imputing insolvency to merchants, traders or others in business is because virtually every business is dependent upon credit.

 

Defenses

A business sued for commercial disparagement has defenses. First, truth is an absolute defense to a commercial disparagement claim. Second, the speaker may have either an absolute privilege or a conditional privilege against a commercial disparagement claim. For example, statements made in a judicial proceeding and statements made by a public officer in the performance of his or her duties are absolutely privileged. Conditional privilege occurs when the defendant has made his statement in order to protect his life, his good name, his family, his property or some similar legally protectable interest, or has made the statement to public officials concerning law enforcement or legislative officials.

 

What are the Damages for the Tort of Commercial Disparagement?

Commercial disparagement is not the same thing as the tort of defamation. There is no need to show damages and a business can sue for both defamation and commercial disparagement if it so wishes. However, damages may be nominal unless specific damage to a business’ reputation or sales is evidenced. Damages awarded may include loss of reputation, loss of sales, and punitive damages if egregious enough.

The law of commercial disparagement is complex. If you believe that you or your business is a victim of business/commercial disparagement, contact the experienced attorneys at Meyers Roman Friedberg & Lewis, LPA to evaluate your case. The laws regarding commercial disparagement vary depending on the state. Call today to find out more information (216) 831-0042.

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